SOLUTION TEXTURES LIMITED V COLEMAN AND COLEMAN HC AK CIV 2009-404-001052 [2009] NZHC 724 (1 July 2009)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
                                                                     CIV 2009-404-001052



              BETWEEN                      SOLUTION TEXTURES LIMITED
                                           Appellant

  
           AND                          PETER MARTIN EDWIN COLEMAN
                                           AND JUSTINE KAY COLEMAN
                                           Respondents


Judgment:     1 July 2009 at 9.30 a.m.


                          JUDGMENT
OF POTTER J
                              Re costs appeal




                       In accordance with r 11.5 High Court Rules

                     I direct the Registrar to endorse this judgment
                     with a delivery time of 9.30 a.m. on 1
July 2009.




Solicitors:   Inder Lynch, P O Box 76-745, Manukau, Auckland 2241

Copy to:      P M E Coleman, P O Box 4107, Shortland
Street, Auckland 1140
              P M E Coleman, 2160 Hunua Road, RD, Papakura, Auckland 2210


SOLUTION TEXTURES LIMITED V COLEMAN
AND COLEMAN HC AK CIV 2009-404-001052 1 July
2009

[1]    The interim judgment of 23 April 2009 allowed the appellant's appeal against
costs of $5,000 plus disbursements awarded in the District Court.            I held the
appellant is entitled to its actual and reasonable
costs in relation to these proceedings
pursuant to s 23(2)(a)(ii) of the Construction Contracts Act 2002. This provides that
the
payee (in this case the appellant) may recover from the payer (in this case the
respondents) "the actual and reasonable costs of
recovery awarded against the payer"
in any Court.


[2]    The appeal related solely to the issue of costs. I required the appellant
to file
itemised bills of cost so I could determine whether the costs claimed are actual and
reasonable.     The appellant filed
a memorandum dated 4 May 2009, with fully
itemised bills of cost attached. I directed at [19] of the judgment of 23 April 2009,
that
copies of this material should be served on Mr and Mrs Coleman, which has
been done. Although Mr Coleman advised a member of the
Registry staff by
telephone that he proposed to file a memorandum in reply, he has not filed any such
memorandum.


[3]    I have
considered the itemised bills of cost which relate to the hearing in the
District Court and the appeal in this Court.


[4]    Costs
claimed in relation to the District Court proceedings are $14,945 plus
GST and disbursements.        The breakdowns provided of the
various accounts
generally support the appellant's contention that these accounts are reasonable, save
that I consider the amount
of time claimed in relation to submissions to be on the
high side. The amount of time claimed for the preparation, checking and finalising
of submissions in the accounts dated 7 October 2008, 16 January 2009 and 2
February 2009 (I have apportioned an estimated half hour
from the attendances on
29 January 2009 to submissions as well as the half hour recorded on 30 January
2009) totals nine hours. This,
I consider exceeds what is reasonable to address what
was essentially a fairly confined point in the District Court. An assessment
of what
are reasonable costs can only be within a range. I allow costs in the round sum of
$14,000 plus GST and disbursements in
respect of the District Court proceedings.

[5]    In relation to the appeal, the sum claimed is $9,600 plus GST and
disbursements.
However, at paragraph 7 of Mr Airey's memorandum of 4 May 2009
he seems to accept that $265 included in the account for $2,750 plus
GST and
disbursements, dated 18 March 2009 relates to attendances which are not recoverable
under s 23 of the Act.


[6]    Again,
in relation to submissions I find the claim for approximately five
hours detailed in the breakdowns of accounts dated 7 April 2009
and 1 May 2009, to
be on the high side. Allowing for the reduction of $265 referred to above and a
reduction in respect of time spent
on submissions, I would allow costs of $9,000 plus
GST and disbursements in relation to the appeal.


[7]    However, I also disallow costs involved in preparing
itemised accounts.
These attendances relate to post-hearing matters not directly associated with
recovery of the claimed amount.
       They are in the nature of account recovery
attendances.   I do not doubt the time recorded as involved in preparing this
information,
but I do not consider it is a cost the payer should meet.


[8]    I accept and allow for the taking of further instructions in relation
to the
appeal costs as required by [18] of the interim judgment. But, I note there appears to
be duplication in the entry of $105
for drafting the memorandum shown on both 28
April and 30 April 2009. I reduce the costs on appeal by a further $500 on account
of
the itemised accounts.


[9]    The outcome of the application of s 23(2)(a)(ii) of the Act which authorises
the recovery of actual
and reasonable costs, can readily result in a disproportionate
outcome for the payers, the respondents in this case. In this case,
the costs incurred
will approximate the amount of the "payment claim" for which summary judgment
was entered in the District Court.
This is a factor potential payers need to bear
clearly in mind when faced with a payment claim under the Act.

Result


[10]   
 Costs are awarded to the appellant in the total sum of $22,500 plus GST, and
disbursements as approved by the Registrar.